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Harvest Volatility Management Strategies Affected by Adverse Market Condition

Levin Law | 9.20.2019
Collateral Yield Enhancement Strategy

Harvest Collateral Yield Enhancement Strategy (CYES) Fails to Deliver

Harvest Volatility Management (“HVM”), founded in 2008 offers active, risk-managed investing according to its website.  Unfortunately for some investors, HVM’s strategies failed to yield profitable returns and for many, caused significant losses.   Levin Law is investigating HVM’s Collateral Yield Enhancement Strategy (“CYES”), which is believed to have been excessively risky.   Many investors who were recommended to invest in the strategy suffered significant financial losses. In arbitration claims filed with the Financial Industry Regulatory Authority (“FINRA”) investors argue that the risks of the strategy were not adequately disclosed and that they suffered significant losses as a result of certain broker-dealer’s wrongdoing.

Many brokerage firms, including Merrill Lynch and Morgan Stanley, recommended and sold CYES products to their customers.  Investors have alleged that they were sold the CYES strategy as a “safe” overlay strategy with low risk. Investors allege that the financial firms, however, did not fully and properly explain the risk associated with the strategies.  In December 2018, the market took wild swings rising and falling hundreds of points within short periods of time. For many investors, the CYES strategy offered by Harvest Volatility Management was not suitable as many investors who believed that they were in a low-risk strategy suffered meaningful losses in the face of market volatility.

Victory Capital Cancels Planned Acquisition of Harvest Volatility Management

In April 2019, Victory Capital announced that it would be terminating its planned acquisition of Harvest Volatility Management.  According to a company press release, the decision was made “in light of recent adverse market conditions affecting Harvest Volatility Management’s (“Harvest”) largest investment strategy.”

Recovering Losses

The CYES risky investment strategy involving call-and-put spreads was likely not suitable for many investors.  If you have suffered losses in the CYES strategy, the “iron condor” strategy, or other yield-enhancement strategies and experienced significant losses, contact us for a free case evaluation to determine whether you may be able to recover damages through a FINRA arbitration.   Levin Law’s attorneys have recovered millions on behalf of investors who have suffered financial damages as a result of being sold unsuitable risky securities and other investment products. Contact Levin Law today at (305) 402-9050 for a free consultation.

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